Syngenta Nears Deal With ChemChina

China National Chemical Corp. is nearing an offer to buy Syngenta AG that values the Swiss pesticide company at roughly $43 billion, according to people familiar with the matter.

The deal could be announced as soon as Wednesday, although it could still fall apart, the people said.

If consummated, the transaction would represent the largest foreign acquisition by a Chinese company and would continue the recent shopping spree by the country’s companies. Terms of the deal call for a price of about 470 Swiss francs, or $461, a share.

Shares in Syngenta rose sharply after The Wall Street Journal first reported the news. The stock was up 5.7% at 399.90 francs in Zurich on Tuesday afternoon.

The deal would mark the latest consolidation of the chemicals sector after DuPont Co. and Dow Chemical Co. announced their merger in December. The trend is shrinking the number of companies that dominate the global seed and pesticide business.

Any deal between China National Chemical, known as ChemChina, and Syngenta would need to pass regulatory examination, which bankers and lawyers said could prove difficult. They stressed especially that U.S. authorities would scrutinize the transaction, because much of Syngenta’s seeds business is based in the U.S.

The deal, if completed, would illustrate how China’s slowing economy hasn’t at all damped huge ambitions by its state-owned enterprises to scoop up prized overseas assets.

Rather, as the world’s second-largest economy tries to upgrade its domestic industry toward higher-value products, the technology and know-how offered by companies such as Syngenta become all the more critical to drive growth.

ChemChina is already one of China’s biggest and most ambitious state-owned enterprises. The closely held company says it employs 140,000 people and delivered sales of 240 billion yuan ($36.5 billion) in 2013, according to its website.

The company, led by founder Ren Jianxin, has worked hard in recent years to present itself as an open and globally minded enterprise. Many of its Chinese state-owned competitors shy away from international attention.

After ChemChina agreed to buy tire maker Pirelli & C. SpA of Italy last year, top Chinese executives including Mr. Ren hosted a nearly three-hour briefing for foreign journalists at ChemChina’s headquarters in Beijing. Executives gushed over their love of European soccer and history, and pledged at the time to uphold the Italian company’s autonomy.

A spokesman for ChemChina didn’t respond to a request for comment on the Syngenta deal late Tuesday.

Monsanto Co. of the U.S. last spring kicked off the current deal-making wave in the chemicals sector when it proposed to buy Syngenta. After unsuccessfully courting Syngenta investors and sweetening its offer to $46 billion in cash and stock, Monsanto dropped its pursuit in August. That left many of Syngenta’s shareholders frustrated because of a steep decline in the Swiss company’s share price amid a grim outlook for the sector.

Since then, Syngenta has said that it is discussing possible deals with multiple parties, a shift in its initial resistance to a takeover.

ChemChina has been on a spending spree in recent years, including a $1 billion deal last month to buy German equipment maker KraussMaffei Group.

For Syngenta, a deal with ChemChina, a smaller competitor in agricultural products, likely would face lower regulatory risks than a combination with its main Western rivals, which also include Bayer AG and BASF SE.

Many shareholders would welcome a deal with ChemChina, partly because it is expected to make an all-cash offer as opposed to Monsanto’s mix of cash and shares.

“ChemChina would be the perfect solution for shareholders, especially if it was all cash. It would have much less regulatory issues than a link with Monsanto, and there would likely to be less jobs lost in Switzerland,” said Martin Lehmann, a fund manager at 3V Asset Management, which holds a stake in Syngenta.

Despite its charm for shareholders, the deal faces risks. ChemChina might need to get approval from the Committee on Foreign Investment in the U.S., or CFIUS, the federal body that screens corporate takeovers for security concerns.

Chinese acquisitions have undergone more intense scrutiny in the U.S. in recent years. Most recently, CFIUS quashed a deal by a Chinese investment fund to buy the lighting business of Philips NV . The unit had manufacturing and research-and-development facilities in the U.S.

Despite headwinds, Chinese companies last year spent more than $112 billion on acquisitions across the globe, according to research firm Dealogic.

John Revill and Brian Spegele contributed to this article.

Write to Rick Carew at rick.carew@wsj.com, Shayndi Raice at shayndi.raice@wsj.com and Eyk Henning at eyk.henning@wsj.com

Breaking the story

Rick Carew, Shayndi Raice and Eyk Henning were first to report that China National Chemical Corp. was nearing a deal with Syngenta AG, according to sources. ChemChina’s offer for a stake in Syngenta values the agricultural-chemical company around $43 billion.

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